Philadelphia Considers Draft Proposed Amended BIRT Rule

The City of Philadelphia Department of Revenue (DOR) recently released a draft proposed Business Income and Receipts Tax (BIRT) regulation, which updates its nexus standard following South Dakota v. Wayfair.

The proposed changes reflect the DOR’s view that “businesses’ economic and virtual connections to the taxing jurisdiction are sufficient to create constitutional nexus,” and include a bright line economic nexus standard of $100,000 in Philadelphia sales to trigger BIRT filing requirements. According to the DOR, Wayfair “doesn’t impact Philadelphia’s 2 percent sales tax (that’s still based on the seller’s location under Pennsylvania state law), but it did affirm Philadelphia’s longstanding ‘active presence’ rules” regarding BIRT.

Click here for more information on Philadelphia’s proposed BIRT regulation.